For many entrepreneurs, the independence of self-employment is enough to offset the possibility of taking on more debt and losing their initial investment. Still others prefer the steadiness of a home based business that can be built up and turned over at a moment’s notice. Many entrepreneurs are careful to note the advantages and disadvantages of starting their own business as they weigh the pros and cons.
Advantages. Independence. Self-employed entrepreneurs are generally their own supervisors. They make all of the decisions related to their businesses. They determine what hours to work, when to take a vacation, and what to charge for their services.
For some entrepreneurs, the financial security is worth the risk of starting their own business. Economists caution, however, against the extreme optimism that may be fueled by this sort of reasoning. The startup of small businesses has a much better chance of succeeding than do those for which substantial capital is required. Also, the entrepreneurial statistics on small businesses that fail to show that entrepreneurship statistics of major businesses continue to rise.
Disadvantages. Not all entrepreneurs succeed. There are a wide range of reasons why small businesses fail. Some of them include poor marketing strategies, a poor product, unqualified service, and supportive owners. These reasons contribute to a large number of the entrepreneurial statistics that reflect the overall decline in entrepreneurial spirit across the country.
Other factors have far less to do with the characteristics of the business owner or the nature of the product or service. Many of these obstacles come from outside forces. Examples include recession, natural disasters, terrorist attacks, and changing consumer preferences. While entrepreneurs would do well to heed advice on how to overcome such externalities, they should also be mindful that many businesses have failed precisely because they did not take advantage of opportunities where they did not exist.
One common thread among the many obstacles faced by new small-business owners is the inadequate time investment. This occurs even for the most skilled entrepreneurs. Some of the advantages offered by a more elaborate structure lead many entrepreneurs to short-term success. As they gain experience, their level of skill may rise above their abilities. In many cases, small-business owners find their skills grow as they work with more experienced entrepreneurs. They learn the advantages and disadvantages of their business and apply this knowledge to future ventures.
Successful entrepreneurs have access to more sources of capital and can leverage their skills. Entrepreneurship does not happen overnight, especially not for first year new ventures. For example, many young middle-aged men find themselves unprepared to assume control of a business when they enter the workplace. Most successful businesses are structured in ways that make it easy for young men to assume control at appropriate times.
There are several additional challenges facing entrepreneurial startups. These include the difficulties of navigating a fledgling business, significant investment required and the need to build organizational capital as the business grows. The entrepreneurship failure rate for businesses is approximately 15% per year. A more experienced entrepreneur has already developed his or her skills and knows what obstacles will arise once a business goes live. He or she will be better prepared to deal with those problems. He or she will also be better able to anticipate the problems that entrepreneurs will encounter and address them before they occur.
Global entrepreneurship is a burgeoning segment of the global economy, but it can take time to develop. Many countries lack the entrepreneurial know-how and experience to encourage their local business community to take on international ventures. One way to encourage international ventures is to provide support for businesses during their development stages. An expert at understanding the needs of global entrepreneurs statistics, an international venture capitalist should be able to provide advice that can help businesses in emerging nations increase revenues, reduce their dependence on government assistance, attract new customers and find ways to maximize productivity and profit.
A knowledgeable and supportive business mentor is essential for successful entrepreneurs. Babson has identified a series of seven “building blocks” that must be present for a business to grow and prosper. Those seven building blocks are: ownership and leadership, product, market, marketing, business development and customer relations.
An entrepreneur must also develop specific startup strategies. This includes developing business plans, identifying obstacles, evaluating potential solutions and funding sources. Good advice on how to build a strong business case and turn those issues into winning strategies can come from an advisor. The investment made in a good advisor is an investment in your future. When you are ready to invest in yourself, trust the advice of an advisor who has served the entrepreneurial community before and become part of the network of successful entrepreneurs.